“There was continued talk of Pru having ‘optionality’ (CEO Tidjane Thiam) over the business by 2013 which we view very positively,” Barrie Cornes a London-based analyst at Panmure Gordon & Co., wrote in a note to clients today. Robin Tozer, a Prudential spokesman, declined to comment on the presentation.
Prudential, the U.K.’s biggest insurer, is seeking growth in Asia, committing capital and manpower to the division, which Thiam says will in future be the most profitable of its four businesses. The insurer also has operations in the U.S., which was its most profitable unit in the first half, the U.K., and an asset management division, M&G Investment Management Ltd.
The London-based insurer last year set itself targets of doubling 2009 Asian profit by 2013 and boosting the amount of cash its U.S. and U.K. businesses generate. The firm is on course to meet those aims, Thiam said last week.
At the conference with analysts and investors in Kuala Lumpur, Thiam said meeting those targets would give the company the choice of selling or spinning off assets, according to Eamonn Flanagan, a Liverpool-based analyst at Shore Capital Group Plc.
Thiam said if targets are met “there is considerable optionality for management and shareholders in terms of what it then does with the business,” Flanagan said in an e-mail. Prudential could choose to keep the company together, demerge some or all units, or seek to sell divisions, he said.
Prudential’s assets would be valued at about 924 pence a share if broken up, said Cornes, who has a “buy” rating on the stock. The share price fell 2 percent to 603.5 pence at 12:50 p.m. in London trading, valuing the firm at about 15.4 billion pounds ($24.3 billion).
The insurer this week announced plans to rebrand its Asian asset management division as Eastspring Investments, rather than using the M&G moniker.
“This is in keeping with our view that the Pru will divest of its businesses in 2013-14, if a reasonable value is not ascribed to each business,” Cornes wrote in a separate note yesterday.
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